Elon Musk’s Push to Cut Spending Puts Federal Jobs in the Spotlight

Hello! An AI app that’s always listening and learning from everything you do. Yay or nay? Former Google X employees hope you’re into it because that’s the idea behind their startup TwinMind, which just launched out of stealth.

In today’s big story, Musk’s cost-cutting efforts in the US government mean millions of federal employees are on edge about their future.

What’s on deck:

But first, cuts are coming.

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The big story

No more government guarantees

The hottest trend in Washington, DC, might be updating your résumé.

Elon Musk’s government efficiency commission has been tasked with cutting government spending, raising questions about the future of millions of jobs.

Business Insider’s Ayelet Sheffey and Madison Hoff have a breakdown of the number of employees and salaries at different government departments.

The average compensation for most departments was over $100,000, with the Department of Education topping the list ($144,561). Veterans Affairs was the largest employer — 486,522 workers — and more than double the second-biggest department (Homeland Security’s 222,539 employees).

The specifics on how the Department of Government Efficiency will operate still aren’t clear, but Vivek Ramaswamy, who is co-leading DOGE with Musk, has said entire federal agencies could be cut.

That might sound drastic, but some of the biggest areas of government spending are a lot harder to touch.

Social Security ($1.46 trillion) and Medicare ($874 billion) are considered mandatory spending, meaning they don’t require congressional approval each year and would require a major legislative push to make cuts or other changes. Cuts made there could also kick off a firestorm from the general public.

Musk also isn’t a stranger to taking big swings that others doubt are possible. When he acquired Twitter and cut 80% of the staff, many predicted it was the end of the app. More than two years later it’s still running and the center of public discourse.

But eliminating entire departments comes with its own set of challenges, write BI’s Alice Tecotzky and John L. Dorman. DOGE will likely operate as an advisory group, without the powers to enact changes itself, experts told BI.

Government jobs’ potential reckoning is happening after the public sector got a ton of attention this year.

Fed up with the layoffs and volatility that plagued the job market in 2022 and 2023, government jobs suddenly became an attractive alternative.

Pay in the public sector largely lags behind private-sector jobs, but that’s somewhat offset by good benefits, retirement plans, and job stability. Younger workers, in particular, don’t seem to mind the tradeoff.

Now they’ll potentially face an environment they were looking to escape, where jobs aren’t guaranteed and things can change on a whim.

There could be a silver lining. In October, Musk said he’d consider severance packages as much as two years’ pay to help alleviate the transition.

“We just have too many people in the government sector, and they could be more productive elsewhere,” Musk said.

News brief

Top headlines

3 things in markets

1. What people are saying about one of Trump’s most important remaining cabinet picks. The president-elect has a handful of candidates for Treasury Secretary: hedge fund manager Scott Bessent, Cantor Fitzgerald CEO Howard Lutnick, Apollo cofounder Marc Rowan, and former Fed governor Kevin Warsh. Here’s some of the best analysis on the decision.
2. When it comes to Trump, past outcomes aren’t indicative of future results, according to one research firm. BCA Research said investors are wrong to think the growth the market saw in 2017 is replicable in 2025. The president-elect enters a more difficult economic environment compared to eight years ago.
3. Wall Street turns bearish on Chinese stocks. Analysts at Goldman Sachs and Morgan Stanley are cutting outlooks for China’s stock market despite the slew of stimulus measures the country announced recently. The combination of Trump’s trade plans negatively impacting China coupled with a lack of more government aid has them cautious.

3 things in tech

1. These potential partners could make Amazon’s Alexa smarter. Amazon held talks with several different companies to upgrade some of Alexa’s specific capabilities, according to an internal document obtained by BI. Among the possible new partners are Uber for ride-hailing, Instacart for grocery shopping, and OpenTable for restaurant reservations.
2. Verily is set to cut important ties with Google in December, internal documents show. Alphabet’s life sciences subsidiary is preparing to detach from Google, according to two people familiar with the matter and internal documents reviewed by BI. Verily told employees the separation efforts are crucial to eventually becoming a fully independent company.
3. Tech jobs are mired in a recession. Hiring for software engineering roles — once believed to be recession-proof — is down 26% since 2018, according to new data from LinkedIn. White collar hiring is in a huge slump, and tech workers are some of the hardest hit.

3 things in business

1. For the X-odus, there’s nothing but Bluesky ahead. Since a role was carved out for Elon Musk in the Trump administration, people have been fleeing X in droves. More than a million people have now set up shop at Twitter’s competitor Bluesky — and thanks to a nifty Brazilian startup, they’re taking their old tweets with them.
2. Jake Paul’s greatest strength: grabbing attention. Netflix’s Jake Paul-Mike Tyson fight wasn’t boxing’s finest moment, but it was a win for viewership. Sixty million people tuned in to watch the bizarre match-up between the 27-year-old YouTuber and the 58-year-old former champ.
3. Thinking of buying a Tesla? Now might be a good time. Musk’s car company is sweetening the deal by offering free Supercharging and Full Self-Driving to new buyers as it aims for a record number of end-of-year deliveries. Elsewhere, the gifts keep on giving for the EV maker: Tesla’s stock jumped 7% Monday after a report said Trump could ease self-driving car regulations.

What’s happening today

• New York prosecutors propose next steps in Donald Trump’s criminal “hush-money” case.
• Microsoft Ignite annual conference for developers and IT professionals begins with keynote speech by CEO Satya Nadella.
• US-China Economic and Security Review commission delivers report to Congress assessing the countries’ relationship.
• Walmart, Lowe’s and other companies report earnings.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Hallam Bullock, senior editor, in London. Amanda Yen, fellow, in New York. Milan Sehmbi, fellow, in London.